National Grid shares gain about 1.5% after unveiling upgraded capex to reinforce energy grids

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National grid rises 1.54% today

Highlights

National Grid raised its capital expenditure target to at least £70 billion through fiscal year 2031 to expand UK and US electricity infrastructure.
The company projects around 10% annual asset growth and expects underlying earnings per share to increase 8 to 10% per year, with dividends linked to UK CPIH inflation.
Shares of National Grid trade with strong momentum in an overbought zone, with price seen consolidating in the GBX1,238 to GBX1,275 range this week.

Upgraded investments and earnings projections reshape growth outlook

National Grid announced an updated investment plan, raising its capital expenditure target from around £60 billion to at least £70 billion through fiscal year 2031. The strategy focuses on strengthening UK and US electricity infrastructure and facilitating renewable energy connections to address rising power demand. The company anticipates approximately 10% annual asset growth and underlying earnings per share growth of 8 to 10% compound annually, with dividends tied to UK CPIH inflation.

Anton Kharitonov, expert at Traders Union, notes the technical rally in National Grid with the stock trading above key moving averages. He sees momentum indicators in overbought territory, which usually signals the risk of a correction. The bullish response to the updated investment plan may be priced in, while a ceiling near GBX1,275 limits further short-term upside. Kharitonov cautions against overly optimistic expectations, highlighting potential downside if support at GBX1,252 fails. "Overbought readings and crowded bullish positions suggest that gains are vulnerable to a pullback in the coming sessions," he states.

Viktoras Karapetjanc, expert at Traders Union, highlights the positive structural change in National Grid's outlook following the expanded £70 billion capital plan. He believes fundamentals are improving, with strong growth targets and inflation-linked dividends attracting institutional demand. Macro trends also align, as rising renewable integration increases long-term earnings visibility. "Bullish structure remains intact — further growth toward and above GBX1,275 can be expected as institutional sentiment improves," he says.

Sholanke Dele, market strategist, takes a cautious view on the recent surge in National Grid. He observes that widespread overbought signals imply that positive news may have been rapidly absorbed by the market. Dele points to elevated volatility, raising the risk of sharp reversals. "Momentum is stretched, so traders should be wary of a sudden drop below GBX1,252 if sentiment turns," he warns.

Overbought signals emerge as price tests upper resistance

National Grid is trading above its 20-day (GBX1,184), 50-day (GBX1,163), and 200-day (GBX1,237) moving averages, indicating positive short-, medium-, and long-term momentum. The nearest levels to watch are GBX1,252 as near-term support and GBX1,275 as ceiling, with a long-term trend confirmation from the bearish alignment of the MA-50 vs MA-200. Momentum remains strong, as both the Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) signal a "Buy", and the Relative Strength Index (RSI) is elevated at 69.56, approaching overbought territory. The Stochastic RSI, Commodity Channel Index (CCI), and Bull/Bear Power (BBP) all point to overbought conditions, with BBP confirming that buyers dominate intraday momentum. The Awesome Oscillator (AO) also favors the upward trend. Today, the stock is up to GBX1,256, gaining 19 points or 1.54%. After a slight downside gap at the open (about -1 or -0.08%), price is near the day’s high, with intraday volatility at 1.29%. This reflects strong follow-through buying after the open, aligning with the bullish momentum signals but also flashing potential caution due to widespread overbought readings.

Earlier, analysts noted that National Grid's bullish momentum and asset expansion strategy were driving continuous upside potential. The latest surge, underpinned by an updated investment plan and persistent overbought signals, supports this outlook and highlights GBX1,275 as a critical resistance level to watch for a potential breakout or reversal.

Source of Data: NG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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